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PAYROLL PENALTIES WARNING FOR WEST MIDLANDS BUSINESSES

Employers in the West Midlands face thousands of pounds in penalties for late payroll submissions. The warning comes from Will Hanbury, partner in charge of the Payroll team at accountants Bishop Fleming which has an office in Worcester.

"Changes to the tax regime, which come into effect this October, will see HM Revenue & Customs going after firms failing to comply," he said.

"Right now tax officers are gearing up ready to penalise businesses for late payroll filings, which could amount to thousands of pounds even for smaller employers."

Mr Hanbury explained that, since 2013, employers have been required to submit real-time payroll information to HMRC with late filings only penalised at year-end, adding: "That situation is now changing, and non-compliance could prove very expensive."

Under the new rules firms with as few as nine employees who are found filing late payroll submissions face being hit with a monthly penalty of £100 rising to £400 for larger employers with 250+ people. This could be increased by an additional penalty of 5% of the tax and NIC that should have been reported if submissions are more than three months late.

"With the potential for being hit by 11 penalties a year employers could find themselves with charges ranging from £1,100 to £4,400 depending on their size," continued Will Hanbury, adding that the clock was now ticking for businesses in the West Midlands to prepare for the changes.

He said: "Employers with fewer than 50 employees will face automated in-year penalties for late real-time PAYE returns from 6 March 2015. Those who employ 50 or more people will face penalties from 6 October 2014.

"To avoid these charges and remain below the penalty radar employers in the region must ensure they are not only up to date with their real-time online filings, but that they also put in place effective procedures to ensure they remain compliant."